By Jon Bradford, MD of Springboard
The popularity of the Dragons’ Den format has spilled over from the BBC2 television programme into real life with the approach becoming more common as a format for startups for pitch for finance.
If properly managed the Dragons Den format can be an exceptionally valuable tool for teams to raise finance but more importantly get feedback about their proposition. However, when badly managed the format is nothing more than the BBC2 programme - a form of entertainment and a device to allow the Dragons to demonstrate their self importance and their own knowledge of the subject.
If you do feel the necessity to undertake the journey into the Dragons Den, I cannot emphasis the need to be prepared for what awaits you. Yes, this does sound stupid but in reality many underestimate the level of preparedness that is required to really give yourself a fighting chance to raise finance.
From my perceptive there are three things that anyone entering the Dragons Den should focus their attention on. Firstly, the content of their pitch; secondly, the manner in which they deliver the pitch; and finally the ability to answer the wide variety of potential questions that you might be faced with following your pitch. But that is only half the story, all of the above assume that you have a business worth pitching.
How many successful entrepreneurs do you know that started a business trying to sell one thing and ended up selling something completely different?
In the world of the internet, the example which is most commonly used is that of PayPal. The original business plan was based upon a payment system that allowed owners of the Palm Pilot to "beam" money to each other. After a couple of changes in direction they turned in the online payment system that exists today.
So how can you make all of the above happen? Feedback, lots of it and from the right people.
Historically, there has been a basic fear in Europe around talking about your ideas to others and getting feedback. Yes, there is a risk that someone will "steal" your idea but ordinarily the risk is far outweighed by the benefit of getting feedback from others.
And actually, if it is that easy to copy, whether you succeed or fail will be based entirely on your ability to execute and deliver on the original vision of the business - and the likelihood of raising funding on the proposition is limited.
Assuming you have a proposition that is worth pitching, let's revert to the three core elements that make a good pitch in a Dragons Den format.
1.Content; a quick search of the Internet with throw up
numerous different key points that you need to include within a pitch. Remember, there is no right or wrong approach, there is only the best approach for you.
2.Style; arguably this can compensate for an average pitch. At such an early stage, a substantive part of the pitch is the founder of the business and their passion of their product. Whilst it may not ultimately help to raise finance it will help to create a more sympathetic environment and increase the likelihood of constructive feedback.
3.Finally, the dreaded question and answer session. This is probably the hardest part, as it is outside of your control.
This, however, leads back to the initial part of the process - feedback. The more feedback you seek, the more questions you will be asked. The more questions you will have been asked, the greater the probability you will be able to answer them.
For me, what does this mean? This represents the core elements of Springboard . We challenge the key assumptions of each of the businesses, using over 100 experienced entrepreneurs from many different backgrounds and under their guidance help to rebuild the business in more viable form. We coach our teams to articulate their proposal in an engaging format and prepare them for question and answer sessions. This is all done within the format of a 13 week bootcamp and we also invest in our teams. We help teams to raise more finance and for better valuations.
What are you planning for your startup in 2011? Springboard is going to help 10 startups meet their potential. Check out http://springboard.com/